This eSports founder used a brilliant method to land a big investment from legendary tech exec Paul Maritz

Former VMware CEO Paul Maritz likes to make angel investments in companies that he understands. He doesn't play video games and never considered backing an eSports startup.

But when one of his former employees pitched an idea for a player-to-player wagering platform, he was intrigued.

And when Maritz saw people literally lining up around the block to wager on a game, he opened his wallet wide.

As the ex-CEO of VMware, Paul Maritz is a well-known name in enterprise software . But he's the first to admit he knows nothing about video games, much less the hyper-competitive world of eSports. He's not even a little bit of a gamer.

That's why even he was surprised when Maritz become the key angel investor for RumbleMonkey, a year-old eSports platform that launched in March. It lets gamers play head-t0-head games for small wagers. Maritz described his stake as a "Series A." The total investment was in the "very low millions," he says.

Maritz was a key executive during Microsoft's early days, before he was poached to become CEO of VMware. Later, Maritz was tapped to be the CEO of Pivotal, a VMware spinoff. He retired as Pivotal CEO in 2015, but stayed on as executive chairman. In his semi-retired life, he's become an angel investor in a variety of companies.

But eSports is way outside his expertise, he tells Business Insider.

"[RumbleMonkey CEO] Jacob [Rapoport] has taken me in a direction I never expected to go. Other investments I have are much more in my background in enterprise software. Investing in a company like RumbleMonkey is something I never thought I'd do," Maritz says.

A real world test, not a slide deck

Maritz first met RumbleMonkey CEO Rapoport back in the late 1990's, when he worked for Maritz at Microsoft. Rapoport has come to Maritz with startup pitches several times before. What lured Maritz to say "yes" this time was when Rapoport convinced Maritz to come with him to the Penny Arcade Expo (PAX).

Martiz had never heard of PAX — a major gaming convention, held regularly in cities all over the world, especially known for hosting massive tournaments.

"About 20,000 people show up to each of those conferences," says Maritz. "They are enormous. On one night they have to rent out Symphony Hall in Seattle to watch people playing video games."

Pivotal Executive Chairman Paul Maritz Business Insider/Julie Bort Rapoport used the opportunity to tell Maritz about the money in professional eSports these days. The industry generated about $696 million in 2017 in revenue, according to some market research.

Rapoport wanted to bring the excitement of playing video games for a real cash prize to the average gamer. "The equivalent of people who go out to a golf match, put money into the kitty and play for the kitty," Maritz says.

So he built RumbleMonkey to be a platform that handles tiny wagers, verifies who won, and helps gamers find other players of similar ability to play and bet against.

But the real selling point for Maritz was when RumbleMonkey tested his idea at PAX with a pro gamer. Any gamer could challenge the pro to a match for a $5 wager. If they won, they won the money. If they lost, the money would be donated to charity. 800 people lined up to play against the pro, "with lines around the block," Maritz recalls.

A light bulb went off that this was a potentially huge market. He opened his wallet and joined the board. His gamble on this company is proving solid, he says, because about 15,000 applied to be part of the beta program. RumbleMonkey launched in March with just one game, the mega-popular virtual card game "Hearthstone."

"It is the mirror image of the sports world that's growing up in cyberspace," Maritz says. "It's a new opportunity for me to learn about a world that is emerging very rapidly."

All in all, Maritz has a half-dozen angel investments, including a scheduling software company called BoldIQ and an aircraft company in his home country of South Africa. That last one is close to his interests — he may not play video games, but he's a seasoned pilot in real life.